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Suppose you are the marketing manager for an independent supermarket whose positioning is that of a low-price competitor in the market. At a meeting on the topic of pricing policy, the store's operations manager suggests that it is not necessary to have low prices on most of the store's items. He argues that it is sufficient to price most of the store's items in line with the prices charged by competitors as long as you substantially beat thecompetition on a very small number of items that customers use to form their opinion of a supermarket's overall price level.
Problem 1: How would you respond to the operations manager's suggestion?
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